Why healthcare pulled back from blockchain in 2018 & what to expect this year: Q&A with Solaster CEO Stuart Lackey

Stuart Lackey, co-founder and CEO of healthcare blockchain company Solaster in Nashville, Tenn., discusses challenges blockchain technology faced in 2018 as well as the rising prominence of distributed ledger technologies.

Responses have been lightly edited for clarity and length.

Question: Where is blockchain in healthcare now and how will it develop in 2019?

Stuart Lackey: Blockchain and distributed ledger technologies pushed through a challenging 2018, primarily due to the hype around the speculation of crypto-assets, regulatory uncertainty of initial coin offering fundraising and the realization that blockchain technology is not a panacea to fix healthcare. I believe many observers out there conflate the performance of the crypto-asset markets with the meaningful progress of the technology.

In 2018, we saw a pull-back of public support by some large health incumbents after feeling market pressure to investigate and promote blockchain in 2017. Again, the 'blockchain' hype cycle had much to do with that. I often respond to questions or comments around the year-long decline of the overall cryptocurrency market capitalizations, factually stating that 'blockchain technology isn't worse than it was a year ago or three months ago. It's only improving.' More developers are routinely coming into the space and are excited about health, broadly. We have some working products and use cases out there. I believe that will accelerate in 2019, and that's exciting.

Q: What do you think will be the most significant blockchain applications in healthcare over the next five years?

SL: I'll first answer that question by asking 'significant to whom?' What you're seeing now for the most part in healthcare are not true blockchain solutions. They are a form of distributed, permissioned — read and write controlled — databases, DSTs, that are reportedly making existing infrastructure more efficient. That's fine, but is that significant enough to addressing the true, significant challenges in healthcare? I'm not so sure. Remember, the goal is to use 'healthcare' less, not more. Right now, areas of development include: patient data security and custody, care coordination, supply chain management, precision and genomic medicine, clinical research, and drug and vaccine provenance.

Over time, I think you'll begin to see patient-centric health data platforms start to scale using newer technology such as decentralized file storage. You'll begin to see membership health platforms that tie real-time health behavior via reporting and wearables directly to benefits like lower insurance premiums and health sharing. You'll see new, transparent marketplaces for health data, goods and services — that may or may not be tokenized. Ultimately, I think you'll begin to see patients become true 'patient-customers,' leveraging their health and health data as a very valuable asset.

Q: What do health IT leaders at hospitals and health systems need to know about blockchain today?

SL: I think it's the same message for the existing leadership regardless of what technology is being discussed — blockchain, artificial intelligence or Internet of Things. The U.S. is home to the world's best clinicians, and we do the best health research, so that's the good news. We have a $3.5 trillion annual price tag to prove it and some of the worst clinical outcomes in the developed world. Why is that? Largely because key incentives are misaligned.

For too long, centralized players in healthcare — providers, insurers, etc. — have maintained control and profited over the access and delivery of care, while the cost and complexity around these areas have increased. This can be seen in the lack of interoperability and portability of patient health information across disparate, and even within the same, healthcare systems. It's also extremely apparent in the way health insurance contracts and payments are structured with physician provider groups and hospital networks.

Blockchain has the promise, in part, to take healthcare into a new era, as it relates to transparency and the re-alignment of incentives. Remember, blockchain, at its full potential, is a distributed, public database with encrypted transactions around some form of decentralized control or governance. For that to be realized in healthcare, you're talking about creating new, decentralized processes and care models that could significantly disrupt the current system. That's potentially a very scary thought for a large group of heavily capitalized incumbents who profit on the status-quo.